Boeing Co has told customers that it’s approaching a key production target that would signal manufacturing of its all-important 737 jet is back on track following last year’s harrowing mid-air accident.
The planemaker is loading its 737 final assembly lines to build 38 of the narrowbody aircraft a month, the maximum allowed by the Federal Aviation Administration, said John Plueger, the chief executive officer of Air Lease, the largest US aircraft financier.
Spirit AeroSystems Holdings Inc., which builds most of the jet’s frame in Wichita, Kansas, is shipping about nine 737 fuselages each week to Boeing in Renton, Washington, said another customer, who asked not to be identified. That works out to about 36 jets a month, as Boeing tests its assembly lines before officially adopting the 38-jet monthly limit.
Any progress in returning Boeing’s factories to a steady, predictable tempo is a key milestone for customers, regulators and investors after a series of crises, including the near-catastrophic panel blowout on an airborne 737 Max early last year. The FAA has capped production of the 737, a crucial source of revenue, until Boeing proves it had addressed lax quality controls and stabilized its supply chain.
“I have to say Boeing’s made a lot of forward progress,” said Plueger, who built Air Lease into one of the largest aircraft leasing companies over more than a decade with his business partner, Steven Udvar-Hazy.
A Boeing spokeswoman declined to comment on its production plans. A spokesman for Spirit AeroSystems couldn’t immediately be reached for comment.
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Boeing CEO Kelly Ortberg has targeted a monthly rate of 38 for the Max jets by mid-year, then holding steady for several months to ensure the faster tempo doesn’t unduly stress suppliers or Boeing’s own mechanics. The company then plans to ask US regulators to approve the next output hike, likely later this year, to 42 jets a month. Beyond that, it aims to settle into a pattern of steady increases for the 737 about every six months.
“The key to cash generation will be continued progress on the 737 Max ramp,” Ortberg said during an earnings call in April. At the time, Boeing was producing the aircraft “in the low-30s per month,” he said.
Air Lease’s 737 Max have been arriving on time since Boeing rolled out its latest production schedule in November, and the same has been mostly true for its 787 Dreamliners, Plueger said in an interview at the company’s Los Angeles headquarters.
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While that’s a shift from the delays that have plagued Boeing and Airbus SE in recent years, the planemaker faces new risks from tariffs imposed by President Donald Trump and the ensuing backlash from other nations.
“Make no mistake, Boeing is not completely out of the woods,” Plueger said. “It needs to consistently deliver and consistently demonstrate high quality production with no real glitches or problems or safety concerns."
